RE: Progress!2 Apr 2019 13:16
Tungsten, rare earths: China announces fresh quotas for H1 2019
Posted on 1st April 2019 in General News.
In March, China’s Ministry of Natural Resources and the Ministry of Industry and Information Technology announced the rare earths and tungsten mine production quotas for the first half of 2019. Tungsten quotas were set at 49.8kt (65% WO3 basis), while rare earths quotas were 50.4kt of light rare earths and 9.6kt of medium and heavy rare earths.
Roskill view:
The tungsten quota has left a degree of uncertainty in the market. Usually two quotas are given – one for mines where tungsten is the primary (or sole) product, and a second for mines with tungsten as a by-product. The quota for H1 2019 is some 22% lower than the overall quota for H1 2018 (63.9kt) and 3% lower than the primary tungsten quota (51.3kt), with a 12.6kt quota also outlined for by-product tungsten in H1 2018. In 2017 and 2018, the overall tungsten quota increased because of a rise in the by-product quota.
Historically, the quota has lagged some way behind actual mine production; between 2011 and 2018, tungsten mine output exceeded the quota every year. This does appear to have been addressed in the National Mineral Resources Planning (2016-2020) document, which caps tungsten mine output at 120ktpy of concentrates on a 65% WO3 basis (61.6kt contained W) by 2020 and is much more reflective of production in recent years.
Despite increasing by nearly 30% compared to the H2 2018 quota allocation, the H1 2019 rare earths quota has caused little uncertainty, as the MIIT have indicated H1 2019 allocation will represent 50% of the 2019 annual quota. This would result in there being no overall change in the mining quota between 2018 and 2019. Inner Mongolia continues to hold the largest portion of the light rare earth mining quota, with 34.6kt REO assigned to China Northern Rare Earth Group, which operates the Baiyun Obo mine in Baotou.
Rare Earths mining in H1 2019 is expected to remain far below the quota, particularly in Southern provinces where imports of mineral concentrates and semi-processed products have increased significantly since early-2018. Rare earth concentrates imported by China in 2018 and early 2019 have been sourced largely from Myanmar, the USA and monazite concentrates imported from Russia, Brazil and other Asian countries. Rare earth production from imported concentrates and compounds is not included in separation quotas for RE companies and also avoids the resource tax applied to Chinese domestic mining of rare earths.
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